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Is It Legal To Give And Accept Payments In Gold, Instead Of Cash?

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I was wondering if it is legal to conduct business in the UK, by accepting gold as payment, instead of cash?

For example, like buying land and paying gold for it. Or, selling a property and accepting gold?

What about other countries?

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In the last couple of years there was a case in the states where a small businessman started paying staff in precious metal coinage (minted by the US government). And, of course, taxes were paid on the face value of the coinage dispensed.

Their Inland Revenue took a dim view of this and there were some lengthy court battles and .... the little guy lost and the big lawyers won (quelle surprise).

More here: http://www.gata.org/node/7696

The US has some bold statements about gold being real money; built right into the constitution so there is a philosophical dimension to their case.

Here I think that British coins (even of precious metals) are not subject to capital gains tax. I could be wrong on that but it is probably as good as it gets.

Curiously, one or two countries in southeast Asia value and transact property entirely in gold which is a thought provoking possibility.

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From my old accounting days, barter is a bit of a grey area.

I think it would be considered to be a payment in kind, therefore it would be considered as the cash in value or the amount of cash it took to buy if you can justify this.

Heh I know quite a few people trading gold under the table, buying and selling businesses, instead of thick wads of cash krugerands are being swapped.

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I was wondering if it is legal to conduct business in the UK, by accepting gold as payment, instead of cash?

For example, like buying land and paying gold for it. Or, selling a property and accepting gold?

What about other countries?

I don't think there's anything stopping you doing this, as long as whoever you are trading with agrees to it.

The concept of 'legal tender' is actually quite narrow. It's broader in England than in Scotland, but in Scotland even banknotes are not 'legal tender'. They just promisory notes issued by private banks. In Scotland, only coins are 'legal tender'. However, as I understand it, the only consequence of something being 'legal tender' is that you can demand that a debt be repaid in legal tender, and the debtor has to oblige. For example, if you take Scottish £10 note to the Clydesdale Bank and demand 10 pound coins, they have to give it to you. If you demanded £10 worth of fags they wouldn't have to oblige.

In England this situation may be different, as notes are also legal tender, but I don't think anything apart from customer willingness/commercial reality would stop you transacting in gold. Just don't expect to be able to pay tax based on the face value of gold coins.

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Just don't expect to be able to pay tax based on the face value of gold coins.

Why not?

I can't find any cases to prove your hypothesis. A gold sovereign or brittannia are legal tender for their face value. I'm not challenging you I'm just trying to find a definitive ruling. I'd be grateful if you could point me in the direction of any decided case or legislation that clarified the position.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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